FX Market Focused on Washington

The FX market is focused on Washington again. This morning, the USD gathered strength on reports that Senate negotiators are "very close" to a deal on the debt limit extension on government funding bill. China’s Yuan strengthened beyond 6.10 per dollar for the first time in 20 years after the central bank raised its daily fixing to near a record high and the nation stepped up efforts to increase the currency’s global use. China and the U.K. will begin direct trading between the Yuan and the British Pound, Chancellor of the Exchequer George Osborne said in Beijing yesterday.

Today's Events• UK employment in Aug improved to 155K from 125K expected, but jobless claims were the worse in 16 years. .• U.S. NAHB homebuilder sentiment index fell 2 points to 55 in October after dipping 1 point to 57 in September (downwardly revised from 58). Builders blamed some of the decline on uncertainty out of Washington. • Canada manufacturing shipments fell 0.2% in August, contrary to expectations (median +0.2%) but not exactly a surprise following the 1.7% bounce in July • U.K. labor numbers were strong, but average income growth remains anemic. • Fitch placed the U.S. AAA rating on "watch negative" as authorities "haven’t raised the debt ceiling in a timely manner."

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The FX market is focused on Washington again. This morning, the USD gathered strength on reports that Senate negotiators are "very close" to a deal on the debt limit extension on government funding bill. China’s Yuan strengthened beyond 6.10 per dollar for the first time in 20 years after the central bank raised its daily fixing to near a record high and the nation stepped up efforts to increase the currency’s global use. China and the U.K. will begin direct trading between the Yuan and the British Pound, Chancellor of the Exchequer George Osborne said in Beijing yesterday.

Today's Events• UK employment in Aug improved to 155K from 125K expected, but jobless claims were the worse in 16 years. .• U.S. NAHB homebuilder sentiment index fell 2 points to 55 in October after dipping 1 point to 57 in September (downwardly revised from 58). Builders blamed some of the decline on uncertainty out of Washington. • Canada manufacturing shipments fell 0.2% in August, contrary to expectations (median +0.2%) but not exactly a surprise following the 1.7% bounce in July • U.K. labor numbers were strong, but average income growth remains anemic. • Fitch placed...Read More